Brazil: Government modifies the requirement of Instant Lottery bid

The instant lottery is a way in which the player knows if he has won a prize at the moment of schatching the card. Lotex can be operated by Caixa or a distributor.

The decision of the bidding was taken during Temer government. After several presentations of the asset to international investments (called road shows) in cities such as London or Las Vegas, the government performed the first bid attempt in July last year. But it has to be postponed due to the low interest.
The government continued postponing the bidding. New dates were set and the date was modified five times in total. Justification of the technicians was that companies were worried due to the legislation, the voting process and, later on, the change of government.

However, after all those factors, the government still faces difficultues. Set for February 2019, the bid had to be cancelled the previous year. Just two companies were interested: IGT Global Services Limited and Scientific Games Corporation.

Both companies finally gathered in order to evaluate a joint offer. Meanwhile, they demanded answers to the government, such as what would happen if they gave up the asset after the bid. Due to the low interest, the government decided to remake the auction in order to attract more companies.

"We are making a more flexible bid in order to attract more companies, in order to generate competition and assure a market opening," said Alexandre Manoel, Secretary of Evaluation of Public Policies, Planification, Energy and Lottery of the Ministry of Economy.

Now the government has the aim to reduce the experience required operating the instant lottery service. On the original announcement, the company had to demonstrate that it had already administrated an instant lottery. Besides, the government plans to reduce the value of the guarantee to almost a third compared to the latest announcement.

After research performed during Temer administration, by Ministry of Finance and BNDES (National Bank for the Economic and Social Development), the economic team decided to bring, in exchange, a payment in charge of the winning company.

The government thought that the tender would release the government from administrating the business. Besides, the process would guarantee a charge due to the operating rights as well as the payment of the subvention.
While Lotex subvention is discussed, the Ministry of Economy receives calls from lawmakers in order to support a wide launch of games, there are bingo halls and even casinos.

However, Manoel says that there is not time to debate a gambling law yet, because there are other priorities on the agenda, such as structural reforms on social security and the tax system.